Discuss the salient points to be kept in mind as a Company Secretary while drafting a contract of Appointment of a person as Managing Director of the Company.

While drafting a Contract of appointment of a person as a Managing Director following points need to be kept in mind: The person who is being appointed as Managing Director should be a Director of the Company, and He must be entrusted with substantial power of the Management. Usually the Articles of Association of Companies empower the Board of Directors to appoint one or more of the Directors as Managing Director(s) and fix their remuneration subject to the provisions of section 196, 197, 198, 199, 200 and other applicable provisions of the Companies Act, 2013 and rules made thereunder. The Board of Directors critically examine the draft agreement for appointment of Managing Director and after having approved the same with or without modification, authorises one of the Director to sign and execute the same on behalf of the Company. It should, therefore, be made sure that the person executing the agreement on behalf of the Company should be authorized by the Board of Directors.